The 2011-2012 Scorecard

For the sixth year, the Kentucky Club for Growth is proud to release our Legislative Scorecard -- our ultimate taxpayer tool to see how your legislators are spending your tax dollars!

While most legislators continue to talk about limited government and cutting budgets, they don't support their rhetoric with their votes in the General Assembly. New taxes, expensive health care mandates, bailout funds and new licensing fees and requirements are continuously supported by the majority of members of the Kentucky General Assembly.

We have ranked Kentucky's legislators based on their votes on these issues of fiscal responsibility and economic freedom.

Follow the links below to see how your legislators ranked. We have ranked the 2011 and 2012 Sessions together in our overall ranking so that you can see how they've voted cumulatively during the budget cycle (and the political cycle). To look at each year's ranking, you can view the individual vote tallies for each year. Additionally, you are encouraged to view the Scorecard Justifications to see the ridiculous, and sometimes good legislation that we score.

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A Tax Break Is Not "Spending"

Kentucky spent $1.29 billion on economic development incentives over last decade

Kentucky has spent $1.29 billion on economic development incentives over the last decade, mostly in the form of tax breaks to companies that pledged to create jobs, according to a new report shared Thursday at a legislative hearing.

We are not advocates of using tax breaks as economic incentive, preferring instead a competitive tax code that attracts employers and enabled entrepreneurs. Offering tax breaks to certain companies that meet certain conditions is allowing the government to pick winners and losers in the marketplace. Instead of letting the government chose which corporations pay $129 million less in taxes annually, Kentucky could simply cut the corporate income tax rate 36% and expect the same revenues.

But we digress from the point we wished to make, which is that, under no circumstances can keeping the money you earned and not providing it to the state be considered state spending!

The state is not "spending" by not taking your money from you.

The article has other half-analyzed ideas, like:

Kentucky is a tax-friendly state for businesses. The overall share of business profits taken as taxes in Kentucky is 18.2 percent, compared to 19.3 percent on average for the peer states.

We haven't seen this particular study, but we do know that Kentucky has a disproportionally progressive tax system and relatively high state and local income taxes, both of which place Kentucky at a competitive disadvantage when it comes to creating and attracting businesses.

Kentucky should throw less money at businesses and invest more in schools, vocational training, transportation and high-speed Internet access, said Jason Bailey, director of the Kentucky Center for Economic Policy in Berea.

Recently, the Governmental Accounting Standards Board issued new rules governing the accounting practices of state pensions, rules designed to expose soft accounting that allows states to be more optimistic than they should. It will eliminate overly-rosy assumptions of market returns, and force underfunded states to assume that their plans will go broke.

The new rules are the result of more than five years of work by the Governmental Accounting Standards Board on one of the most contentious topics the agency has ever tackled. The current rules have been criticized for making pensions look more affordable than they really are and creating incentives for governments to take undue risks with taxpayer money.

In many struggling municipalities, the coming changes, which are expected to be ratified by the board on Monday, could lead to credit rating downgrades, making it more expensive to borrow. The rules do not take full effect until 2015, but some governments are likely to adopt them sooner.

While some economists do not think the rules go far enough, Kentucky's pension system will certainly be exposed.

Mr. Attmore declined to predict which states and cities would bear the brunt of the board's rule changes, but said that, in general, it would be those that had failed, year after year, to set aside as much money as their actuaries instructed. Such plans include those operated by Illinois, New Jersey and Kentucky.

Kentucky's current pension system is unsustainable. The time to reform was years ago, and it's about to be exposed.

Several Disapointing Proposals for Funding Roads

Two years ago, Kentuckians for Better Transportation asked the following perplexing question about the future of transportation funding in Kentucky:

And so, it is crystal clear: the "plug-ins" are coming. What remains unclear is this: how are they going to pay their fair share for the use of the city streets, county roads, and the highway system?

The traditional system of road financing is that gas tax revenues and titling fees go to the Kentucky Transportation Cabinet and basically create its budget, combined with federal road funds that largely originate from federal gas taxes. At the time we mused:

While there will be no shortage of gasoline consumers in the immediate future, we will face an increasing number of drivers of vehicles that aren't paying for the roads they drive on through this traditional system. And we may have to completely rethink transportation funding in this country.

Kentuckians for Better Transportation, whose 240 members include local governments, road contractors and other businesses, wants the General Assembly to consider adding a fee to annual auto registrations for electric cars and other vehicles that run on fuels other than gasoline.

Stan Lampe, president of KBT, said the fee probably would be $100 to $150.

Placing a fee on the Kentucky owners of a particular type of vehicle has little relationship to the amount of road use in which that owner participates. In fact, a preset fee would only serve as a disincentive to purchase that type of vehicle. Additionally, having the state of Kentucky levy a fee means that only Kentucky citizens are burdened to support roads in a state at the crossroads of our nation. The KBT fee proposal is not a fair assessment for use.

Rep. Hubie Collins, the Chair of the House Transportation Committee, also rejected the idea.

House Transportation Committee chairman Hubert Collins, D-Wittensville, said every state would have to face this issue.

"That's why I think federal legislation is needed," he said. "I would hate to see every state go with its own user fee for next-generation vehicles. You'd get a hodgepodge of fees across the nation. I also am concerned that if Kentucky adopted such a user fee on its own, we might run people out of the state."

Unfortunately, Collins' proposal for more federal control of our transportation funding isn't a good proposal either.

A better solution would be transparent, keep the funding in the state and be tied fairly directly to road usage without requiring any tracking of movement. That may be a tall order.

Kentucky Energy Policy Failing Kentuckians

The Heritage Foundation recently pointed out that energy-producing states have fared rather well in the recent years of the financial crisis:

Household income rose faster in North Dakota than any other state between 2005 and 2010. Only the District of Columbia -- home to the bloated federal government and overpaid bureaucrats -- had a bigger increase, according to U.S. Census data. Three other energy-producing states -- Colorado, West Virginia and Wyoming -- rounded out the top five.

North Dakota was one of only 14 states (and the District of Columbia) to experience a rise in household income between 2005 and 2010, according to the most recent Census data. The overall U.S. average during that time declined 4.4 percent. (Complete ranking of all 50 states.)

Much of this is no doubt attributable to a federal government hostile to Kentucky's production of coal, but that doesn't explain how West Virginia has seen success while Kentucky stagnated. The difference with our neighbor points to a difference in state policy, and a failure on the part of our elected leaders to capitalize on an advantage we all know Kentucky possesses.

Increasing Regulation and a Lack of Tort Reform Costing Kentucky

Not only does Kentucky have a worsening regulatory environment, increasing regulations increase the incidence of litigiousness, which conspire together to make the state unfriendly to business and jobs.

The more abundant and specific are regulations governing any industry, the more opportunities there are to sue. That's why the American Association for Justice, which represents the interests of trial lawyers, constantly lobbies for more and more rules and regulations governing everything.

The long-term health care industry's reward for encouraging oversight and transparency is to invite lawsuits that drive up the cost of doing business and ultimately the cost of care to the very people the regulations are intended to benefit.

Many of these lawsuits have nothing to do seeking redress for real negligence or wrongdoing or even with improving conditions for residents. If they exist at all, the alleged abuses often cited in advertisements seeking clients are often based on nothing more than citations for minor or correctable deficiencies. Some may have occurred and been corrected years in the past. Some may never have occurred at all. But because all citations must be reported, even those that are later proved to be unfounded, the data is easily exploited to prey on the emotions of seniors and their families in order to seek clients for litigation.

It is one thing to seek redress when a facility has been negligent. Every industry can and should be held accountable for its shortcomings. However, it is another thing altogether to take information intended to benefit consumers, and exploit it simply as a means of trolling for clients.

One of Kentucky's largest providers of long-term care, Extendicare Health Services, has had enough. The company recently announced that it is leasing all of its nursing centers in Kentucky and leaving the state. In a May 14 news release, Tim Lukenda, president and CEO of Extendicare's parent company, said that "the combination of a worsening litigation environment and the lack of any likelihood of tort reform in the State of Kentucky has made this the prudent decision for our company and unit holders."

Now the Commission has held its first two meetings in a series of stops around the state. At each stop, liberal interests like the Kentuckians for the Commonwealth, the KEA and other members of the education establishment have lined up to beg for more tax dollars from Frankfort. In fact, only one presenter in four hours of presentations has really even suggested the creation of jobs as a criteria.

What is supposedly a Commission to discuss Kentucky's tax code spends most of its time discussing spending.

The rumors circulating around the Commission suggest that a recommendation for a $1 billion tax increase is in the works. The more cynical rumors suggest that the whole setup is just a bait and switch for another failed Beshear casino push, where he pits a fictitious need for a $1 billion tax hike against the fictitious need for casinos.

Jim Booth and the few pro-growth members on the Commission better be working on a plan to divorce themselves from this liberal commission and the disastrous track it seems to be taking.

Jefferson Co. Schools Figure Out Parents Want School Choice

The Jefferson County Public School System is so intent on discrediting David Williams' efforts to end the ridiculous busing system in Jefferson County, that they have completely validated the supporters of school choice in Kentucky.

Although much of the debate and changes surrounding JCPS' emotionally charged student-assignment plan has been driven by a desire to shorten bus rides and make neighborhood schools more accessible, a recent district analysis shows that choice is arguably just as important to families as a school close to home.

Out of more than 8,100 incoming kindergarten applications for 2012-13, 53 percent selected as their top choice their "resides" school, which is often the school closest to their home.

But 47 percent -- more than 3,700 kids -- chose a different school, even if it meant a longer bus ride.

"People say everyone wants their closest school, but this tells me that choice is very important," said Jefferson County school board Chairman Steve Imhoff, who believes the data show that a push by some residents and politicians for neighborhood schools wouldn't be as popular as they contend.

Neighborhood schools aren't popular versus having a choice about where your child goes to school. In fact, nearly half of parents choose differently, especially if the 'neighborhood school' is a failing school.

By contrast, several elementary schools in more urban or economically depressed areas such as Shacklette, Semple, Hazelwood and Frayser had far less loyal followings, with just 15 percent to 31 percent of their "resides" students selecting them for kindergarten.

Shacklette principal Candace Sellars said although her school's poor selection rate can be blamed partly on its lack of a preschool program, she recognizes that low test scores also are a factor.

"We understand that student achievement is one of our most important priorities. The arrows (test scores) must go up if we want to increase our student population at Shacklette," she said.

Additionally, we note that this information does not actually support the hypothesis JCPS desires. Just because parents prefer choice over short bus rides, it in no way means that they prefer mandated long bus rides to short bus rides. That decision just isn't examined by the information they provide.

Moffett Keeps Door Open on 2015 Governor Run

In a recent interview with Ryan Alessi, former Republican gubernatorial candidate Phil Moffett declined to close the door on a 2015 bid for the Governors office.

Moffett discussed that win (0:20 and again at 9:30 of the video). And he answered questions about his own future after supporters chanted "2015, 2015" when Moffett took the stage last Tuesday to introduce Massie at the primary victory party. Moffett said he's looking at another bid for governor.

"That's a long way away. I'm still considering it. And I'm open to the idea," Moffett said. "But 2015 seems 10 years from now ... I'm not ready to commit that I'm getting in the race. There's a lot of things that has to happen between now and then."

Many in the liberty movement and Tea Party scold Republicans for not rallying around Moffett in 2011, dreaming that he would have been a better chance to beat Steve Beshear than the Williams-Farmer ticket. While it is possible to argue that the Moffett-Harmon ticket would have been "better", such a ticket would not have been able to even match the $1.1 million Williams raised, which was dwarfed by the Beshear-Abramson pot that exceeded $7 million.

For his part, Mr. Moffett has learned from the experience.

"I faced that same issue when I ran last year. And that is they had never run for office before. Getting to understand that process and raise money and become a formidable candidate, that's something you have to learn over time," he said.

2015 is a long way off, and we should also remember that he filed for the Kentucky House of Representatives while the unconstitutional redistricting maps existed. Moffett's next opportunity to run will come before the Governor's race in 2014 for the General Assembly.

The other advice he offered to Beshear was to not "step forward and make claims up front without knowing what your votes are" -- a reference to Beshear's push earlier this year to allow expanded gambling in Kentucky. The constitutional amendment fell seven votes shy of the 23 needed for approval in the 38-member state Senate.

Finally, he makes foolish claims about his party's political prospects this year...

He said Democrats have a chance to make a run at "several" Republican held-seats. That includes a challenge to Republican Floor Leader Robert Stivers of Manchester..."

Nesler Resigns to Join Ag Dept, Seat Likely to Remain Empty

Rep. Fred Nesler* of Kentucky's Second District has resigned his seat to become a "deputy executive director of strategic planning and administration" in the Kentucky Department of Agriculture.

It's a nice boost to his pension.

Meanwhile, the citizens of Graves and McCracken Counties stand to be disenfranchised for any special session discussions of redistricting or tax reform.

Terry Sebastian, spokesman for Gov. Steve Beshear, said the governor has no plans to call a special election to replace Nesler considering both parties have nominees for the November election in the race to succeed Nesler.

Democrat Kelly Whitaker will face Republican Richard Heath in the November election to replace Nesler in January.

Correction - Originally published post noted Nesler was in the Kentucky Senate. Corrected to House of Representatives. Apologies to Sen. Bob Leeper.

"Thayer, 44, responds by calling Hostetler "a little desperate." Thayer touts his conservative support from U.S. Sen. Rand Paul, R-Ky., the National Rifle Association, the pro-business Kentucky Club for Growth (which ranks him best among 38 state senators) and the anti-abortion Kentucky Right to Life."

But other political experts say they aren't convinced outside groups will want to get involved, especially with public polling showing Beshear with a double-digit lead and Williams' record of occasionally supporting tax increases failing to excite conservative groups such Club for Growth or the tea party-related FreedomWorks.

"They're adamant about the 'no tax' thing," said Jennifer Duffy, a senior editor with the non-partisan Cook Political Report.

We are adamant about the 'no tax' thing, and we will continue to be the taxpayer's advocate in Frankfort.

The Outlook for Small Businesses is Bad, and Bad for the Economy
The NFIB reports: For the fifth consecutive month, NFIB's monthly Small-Business Optimism Index fell, dropping 0.9 points in July--a larger decline than in each of the previous three months--and bringing the Index down to a disappointing 89.9. While the national...

Employment Trends and Rates
Unemployment in Kentucky inched downwards this month: Kentucky's unemployment rate fell to 10 percent in April, down from 10.2 percent a month earlier. The state added 3,800 jobs in the month, as "Kentucky's economy continued to show signs of improvement...

State Budget Surplus Good News for Kentucky Economy
At the end of every fiscal year in June, the state always runs a small surplus. No matter the economic circumstances or budget cuts, because the state is constitutionally required to balance the budget, the state will end up with...

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